Harmon Industries NASDAQ: HRMN For Immediate Release

Charles M. Foudree (816) 229-3345 [email protected]

HARMON + HUGHES = TECHNOLOGICAL LANDMARK

A Giant Step In Wireless Train Control

BLUE SPRINGS, Mo. (Monday, December 1, 1997) -- Harmon Industries Inc., announced it has signed a license agreement with Hughes Aircraft Company for the manufacturing and exclusive marketing rights to a revolutionary new technology that will provide communication-based train control to rail systems in North America and throughout most parts of the world.

The train control technology is based on Enhanced Position Location Reporting System (EPLRS), a highly reliable, wireless data communication network with the ability to accurately determine the location, speed and direction of vehicles. It was initially developed for the Department of Defense as part of the military's digitized battlefield, and was further developed under a cooperative agreement with the Federal Transit Administration (FTA), the Defense Advanced Research Program Agency (DARPA) and the San Francisco Bay Area Rapid Transit District (BART). One of the greatest benefits of the technology is that it is designed to operate in the face of interference. The technology's completely wireless signal path allows ease of installation and maintenance, as well as lower life-cycle costs for new and rehabilitated train control systems.

Harmon, a pioneer in wireless communication in the railroad industry, has offered signal and train control equipment to railroad and rail transit systems worldwide for more than 50 years. This new technology, whose effectiveness was best demonstrated as a defense weapon by American troops in the Desert Storm conflict, will bolster the company's benchmark position in its field. The technology's applicability to train control has been successfully demonstrated by the New York City Transit Authority (NYCTA) and BART.

"Our EPLRS-based technology will provide an excellent answer to the needs of the communications-based train control industry," said Mark Haugen, vice president of Hughes Defense Communications, a business unit of Hughes Aircraft Company. "We believe that Harmon is well positioned to advance the state of wireless train control through the application of this technology and are pleased to be associated with them."

Harmon will integrate the technology into an advanced Communication Based Train Control (CBTC) system and provide an open architecture design for application to different operational requirements and allow other signal system integrators to utilize the technology.

"The license agreement with Hughes gives Harmon a tremendous advantage in the development and implementation of CBTC systems for our customers," said Björn E. Olsson, president and chief executive officer of Harmon Industries, Inc. "This strengthens our technological leadership, which is a fundamental component of our strategic plan."

The license agreement will improve Harmon's candidacy for contracts with BART and NYCTA, two major transit properties who are actively pursuing communication-based train control. NYCTA plans signal improvements on 20 subway lines throughout the next 15 years at an estimated cost of two to three billion dollars. The agreement will also increase Harmon's potential business opportunities with numerous rail properties who intend to implement CBTC systems, including many in the international market.

Harmon Industries, Inc. is a leading supplier of signal and train control products to freight and rail transit systems throughout North America and the world. The company is traded in the over-the-counter market and is quoted on the NASDAQ National Market System under the symbol NASDAQ: HRMN. For further information, please contact Charles M. Foudree, executive vice president-finance and chief financial officer, Harmon Industries, Inc., 1300 Jefferson Court, Blue Springs, MO 64015. The telephone number is (816) 229-3345.

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